8x8, Inc. Common Stock LD Micro 20th Annual Main Event Conference

Thank you. Thank you. It's really hard to present when you're in tears, so thank you, Chris.

Thank you. Hugh Rees was my head of sales, also still in tears.

Joan Citelli was my in-house head of IR and PR. We had a wonderful dinner last night, which was really amazing. I don't think Dan's. Yes, I'm here. Dan. Dan was the CFO that turned us cash flow positive in 2010? In the June quarter of 2007. June quarter of 2007. He's the sharpest CFO. He's now a venture capitalist. I think he has an open fund. If you have money available to invest, you should invest it with Dan. Because the only reason we're in business in 2026 is because of Dan Weirich. Carbide Ventures is the name of his fund. I'm joined by my current in-house head of investor relations, Kate Patterson, who's over here in the green.

We're here all day, so if you would like to meet with either of us, we are here. Excuse me. I will try to pull my emotions together. We love LD Micro, by the way. Forward-looking safe harbor. All the numbers I'm going to show you are June quarter numbers. Our earnings for the September quarter is going to be November 4th, which is the day after the election, so I'm pretty sure no one will be looking at our earnings. Hopefully, some of you will remember us. Ticker symbol is EGHT. It's 8 without the I. We've been in business, I've been with the company 36 years. I've done almost every job. I take the garbage out. I'm currently on my second tour of duty as Chief Technology Officer. It's what I love doing. But I did serve as CEO for 11 and a half years.

That's when I met Chris. We have posted 22 consecutive quarters of operating cash flow. The CEO between me and our current CEO, Sam Wilson, who's been in the chair just coming up on five years in January. I hate debt. I didn't have any debt when I ran the company with Dan. Our current CEO hates debt as well. There were two CEOs between me and our current CEO who loved debt and ran up a ton of debt, and we'll talk about that in a minute. But we have got just over, I think it's 43% now of our debt off the books. And we are committed to getting to a zero debt state again. We have spent about 20 years building a global telecommunications network. I know the word carrier has negative connotations to it. Low margin, infrastructure, all these negative things.

But in a world of AI, you can't have artificial intelligence that doesn't communicate with the outside world. So AI has to send text messages. We call them SMS messages. It has to make phone calls to people. It has to send video messages. And 8x8's got an incredible global network. Even as in North America, people like AT&T want to shut their network down and get out of the business. We're investing in our network. We have more than 400 patents of how we do that. And we're also doing AI as well. We have a great product we introduced this year called 8x8 AI Studio. In my one-on-ones, I'm showing examples of what we can build with it, how easy it is to build with it, and I'll show you some examples of that coming up. Last fiscal year, we did $736 million in revenue.

We are not small. We're trying to grow that to $1 billion. If you look at the breakdown of that revenue, 50% of that revenue approximately is what we call unified communications. It's business telephony. When we started the business, we sold to consumer. Everything that we do now is B2B. So it's all businesses that we sell to. They're small businesses, they're large businesses. Some of our businesses are people like Mediterranean Shipping Company, PetSmart, very large companies that you've all heard of. But I have a lot of small companies, too. So that's 50% of the revenue pie. Approximately 25% is contact centers. These are call centers that we power. And the other 25%, which is the fastest-growing part of my business, is messaging. So it's sending text messages. There's a new messaging standard called RCS, Rich Communication Services.

It's kind of like the WhatsApp over your phone. So you're getting some of these. If you have an iPhone, it'll actually say RCS. You're getting these RCS messages today. But we hook up with WhatsApp, with Viber, all the things that my kids like to send as well. This is our last quarter. This is the June quarter, $190 million in the quarter. We're growing kind of 5%-6% is our growth rate. We acquired in 2022 a company called Fuze. It used to be known as ThinkingPhones. It took us about three years. It was kind of a rocky road to move that base onto the 8x8 network. We finished that at the end of last year. Had a lot of churn and some headwinds of moving those customers over. So we've been reporting excluding that base that churned off.

Our growth rate without Fuze churn would have been 8%, so a little faster growth if you take that away. You can see 10% operating margins there. I already mentioned the cash flow that we've been throwing off. We have $92 million in the bank at the end of June. This is what the annual numbers look like. Again, without Fuze, 6% growth rate over the fiscal years. I talked about the carrier infrastructure. We're also applying AI to these customers. We capture, think about it, not just the voice, but every message between employees that they're communicating with each other. Every Teams chat goes across our network, every text message, emails go through our contact center platform. Any message that generates a lookup in a CRM like a Salesforce, if you run your business on Salesforce or HubSpot, we integrate with those platforms.

The data that gets pulled up out of those platforms is also stored in a data repository that we maintain. Then we make that available to the AI. All of this data is being fed into AI engines, and I'll talk about that. We're using that in our 8x8 AI Studio product to help these businesses make decisions about how to run their business better. The vision we have for where we're going is to be a platform that drives all of those decision-making capabilities. You think about a business, the most valuable data that you have out there is your communications. Contact center worlds, it's the business talking to its end customers, and that's where AI started, but it's just as important to know what employees are saying to each other. Let's say I have one of my customers calling in with a billing issue.

Great. We've got a billing issue. Maybe there's a problem with the billing platform, maybe a tax rate didn't get updated. All my customers in the state of Illinois have an error in how their taxes are being rated on our platform. What I want to know is not just that I have that issue. I want to know how my billing team starts communicating internally to 8x8. How are we resolving the issue? How did the tax rate update not happen properly in the first place? That's going on in email conversations. It's going on in Teams chat conversations. I want to know how my employees are communicating. If you're not the system of record inside the company employee to employee, you're only seeing part of the problem.

You're seeing how your customers are complaining about an issue, but you're not seeing how your employees are communicating with each other to run your business better so that the problem doesn't happen again. That's what 8x8 brings to that interaction. That's how we see the problem. Most of our customers come to us with disjointed communication systems. They have Microsoft Teams in this part of the business. They might have Slack over here. They've got this Avaya system over here. They acquired a company that was running on Cisco CallManager over here. They've got this mismatch of data all over the place. We unify that, so it's one data store. By the way, they get one bill at the end of the month. Globally, they've got a corporate directory that's all unified. If I want to find Fred in accounting, I can find Fred.